8-KOther EventsExhibits & Filings

JPMORGAN CHASE & CO 8-K Report, Corporate Update (Feb 5, 2014)

Filed February 5, 2014For Securities:JPMJPM-PCJPM-PDJPM-PKJPM-PLJPM-PMJPM-PJAMJBVYLD

Summary

JPMorgan Chase & Co. (JPM) announced on February 4, 2014, a significant settlement with the United States Attorney’s Office for the Southern District of New York, along with the Federal Housing Administration (FHA), the U.S. Department of Housing and Urban Development (HUD), and the U.S. Department of Veterans Affairs (VA). This agreement resolves claims related to the firm's involvement in federal mortgage insurance programs administered by these agencies. The settlement involves a cash payment of $614 million and a commitment from JPMorgan Chase to improve its quality control procedures for future loans submitted to the FHA’s Direct Endorsement Lender program. Importantly, this agreement provides the firm with a release from civil and administrative liabilities under the False Claims Act, FIRREA, and other statutes concerning FHA and VA insurance claims paid to JPMorgan Chase since 2002 up to the settlement date. The company believes it is adequately reserved for this settlement and anticipates no material financial impact from future claims.

Key Highlights

  • 1JPMorgan Chase reached a $614 million settlement with several U.S. government agencies (SDNY, FHA, HUD, VA) concerning federal mortgage insurance programs.
  • 2The settlement resolves claims related to JPMorgan Chase's participation in FHA, HUD, and VA mortgage insurance programs.
  • 3The company will pay $614 million in cash as part of the settlement.
  • 4JPMorgan Chase has agreed to enhance its quality control program for future loans submitted to the FHA's Direct Endorsement Lender program.
  • 5The settlement provides a release from civil and administrative liability for FHA and VA insurance claims paid since 2002.
  • 6The firm believes it is fully reserved for the settlement amount.
  • 7JPMorgan Chase anticipates no significant financial impact related to exposure on future claims.

Frequently Asked Questions

This 8-K filing announces that JPMorgan Chase & Co. has reached a settlement with the U.S. Attorney’s Office for the Southern District of New York and housing agencies (FHA, HUD, VA) to resolve claims regarding its participation in federal mortgage insurance programs.

JPMorgan Chase will pay $614 million in cash. However, the company states that it believes it is fully reserved for this amount and does not expect a significant financial impact from potential future claims.

While this settlement represents a significant step in addressing historical mortgage-related issues, particularly concerning FHA and VA insurance claims paid since 2002, it is focused on specific claims related to federal mortgage insurance programs and does not necessarily imply a complete resolution of all past mortgage-related liabilities.

As part of the settlement, JPMorgan Chase is required to enhance its quality control program for loans that will be submitted in the future to the FHA’s Direct Endorsement Lender program.